The last posting of this blog addressed the myth that
successful people are totally responsible for their success. Successful people are advantaged by a variety
of factors; some are “hidden” advantages and this luck goes unnoticed or
unrecognized by them or other people.
But some factors are more visible and have recognized effects.
Two factors
come readily to mind, although some will even refuse to accept their viability
in advancing or hindering success. They
are class and race. This posting looks
at the first of these factors, class.
The first question to be addressed is:
does parental income affect or correlate with their children’s ability
to garner reasonable income levels? By
reasonable, one can see it as an income level associated with a middle-class
lifestyle.
The Pew
Charitable Trust and the Russell Sage Foundation funded research in this area
at Stanford University. Their overall
finding, as a result of this research, can be summarized as follows:
… approximately half of parental
income advantages in the United States are passed on to children, which is
among the lowest estimates of economic mobility yet produced. The research also finds that the degree to
which income advantages are transferred from parents to children differs across
the income spectrum, and that parental income differences benefit children from
higher-income families more than those from lower-income families. The results indicate that opportunity for
economic success are far from equally distributed.[1]
One statistic that this study reports demonstrates this lack
of opportunity; i.e., children from the 90th percentile of the population
(the top 10%) can expect to make as adults, with their own families, incomes
three times greater than the children from the 10th percentile (the
bottom 10%).
How would one
know that this advantage did not exist as an element of this nation’s economy? Well, if the next generation’s income
distribution shows no relationship with the previous generation’s distribution,
then one could not attribute parental income as a determining factor. If this lack of correlation existed, the poor
would emanate from families across the income spectrum, the same for those who
make mid-range incomes, and the same for those who make high incomes.
This study calls this measure
intergenerational elasticity (IGE). IGE
is expressed as a number from zero (no generational advantage/disadvantage) to
one (total generational advantage/disadvantage). Therefore, any number above zero (and below 1)
indicates some level of parental income effecting their children’s eventual
income level.
As the result cited above indicates,
half parental income advantage is passed to their children and is indicated by
the IGE scores of .52 for males and .47 for females. And these number varies according to the
income levels of parents. The IGE scores
shoot up to the lower .60s for parents in the 50th to 90th
income percentiles.
There seems to be in this study’s
findings a gender difference. Men
benefit or are disadvantaged more – i.e., they have higher IGE scores – than
women. When comparing their own incomes,
men have 40% higher IGE scores than women.
What also affects women from higher income parents and their IGE scores
is their likelihood of marrying men of high-income status; a factor that does
not affect men nearly as much.
As often mentioned in this blog, the
federalist value, regulated equality, calls for proactive governmental policies
to meet these obvious inequalities that, given the above findings, indicate
systemic causes. In that light, this
blog favors what the president of the Russell Sage Foundation said in reaction
to this study:
The report documents that public
policies must do more to level the playing field so that children from low-income
families have greater opportunities to compete in the 21st century
economy. Over recent decades, the rising
income and wealth of affluent parents have allowed them to increase investments
in their children, from day care through college. At the same time, wages have stagnated for
most workers and low-income families have struggled to pay for routine expenses
…[2]
And as for a civics’ national program,
it should make sure that students appreciate what consequences result from
casting a blind eye to this source of inequality. If history is any indication, one result is
those nations so characterized have experienced extreme politics – segments of
the population taking on extreme rightest or leftist beliefs and accompany
motivations to act in radical ways.
Sounds familiar?
[1] “Parental Income Has Outsized Influence on Children’s
Economic Future,” Pew, July 23, 2015, accessed October 31, 2018, https://www.pewtrusts.org/en/about/news-room/press-releases-and-statements/2015/07/23/parental-income-has-outsized-influence-on-childrens-economic-future
.
[2] Ibid.
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